Summary
- Resilient US activity and rising input costs kept the 10-year yield near 5.30% and pushed DXY briefly to 102.0.
- Base metals extended their decline, led by zinc and nickel, while tin remained the only clear outperformer.
- Gold and silver struggled to sustain intraday gains as elevated yields and dollar strength prevailed ahead of US payrolls.
Macro
US equities moved lower after the opening as persistent inflation concerns outweighed evidence of continued economic expansion. DXY briefly touched 102.0, its highest level since May 2025, while the US 10-year yield fluctuated around 5.30%. Brent holding above $101/bbl added to concerns that energy costs could slow the recent improvement in underlying inflation.
US initial jobless claims remained low at 197,000, below the 201,000 consensus, signalling that labour-market conditions remain firm. September ISM manufacturing remained expansionary at 54.5, although slightly below expectations, while new orders and employment strengthened. More importantly for rates, the prices-paid index jumped to 77.9 from 71.1, indicating intensifying input-cost pressures. Construction spending also rose by 0.9%, against expectations for no change.
We see today’s combination of resilient activity, limited job losses and rising manufacturing costs as reinforcing the case for restrictive monetary policy. The data help explain the strength of the dollar and elevated yields despite yesterday’s softer PCE release. With oil prices adding another inflationary risk, we expect equities to remain sensitive to movements around 5.30% in the 10-year yield.
Tomorrow’s September employment report will be the week’s decisive release, with payroll growth expected to slow from August, unemployment forecast at 4.1% and average hourly earnings seen rising by 0.3% MoM. We expect employment growth to moderate without signalling a sharp deterioration in the labour market. Such an outcome would probably keep the dollar supported and yields elevated, particularly if wage growth remains firm, while another strong payroll reading would intensify pressure on equities by strengthening expectations that US rates will remain higher for longer.
Base Metals
Base metals remained under broad pressure as the stronger dollar and elevated Treasury yields weighed on risk appetite. Zinc led the decline to $3,730.50/t, while nickel fell to $15,630/t and aluminium extended its downward trend to $3,118/t. Copper dropped below $14,300/t before stabilising at $14,294.50/t, while lead weakened to $1,859.50/t. Tin was the exception, strengthening to $54,215/t.
The late-session positioning leaves momentum tilted lower across most of the complex. We expect tomorrow’s US employment report to remain the principal catalyst: moderate job creation alongside firm wages would probably keep yields and the dollar elevated, maintaining pressure on metals. Copper needs to recover above $14,400/t to suggest that today’s breakdown is stabilising, while zinc remains vulnerable below $3,800/t.
Precious Metals
Gold traded unevenly around $4,155/oz, with attempted advances towards $4,190/oz repeatedly losing momentum as the dollar approached 102.0 and the US 10-year yield remained near 5.30%. Silver briefly rose above $61.30/oz but subsequently retreated to $60.62/oz, leaving the metal close to the lower end of its recent range.
We expect precious metals to remain constrained ahead of tomorrow’s US payrolls report. Gold needs to regain $4,180/oz to improve the near-term outlook, while silver remains exposed to another test of $60.00/oz. A broadly resilient employment report would likely preserve the rate and dollar headwinds currently preventing a stronger recovery.
All price data is from 01.10.2026 as of 17:30